An off market North Bondi jewel
The client
A local Bondi couple who had contemplated buying an investment property in Sydney on and off for years - always having believed prices would come down one day. They realised that in suburbs like Bondi, properties hold there value.
They both work full time and have children so didn’t have the time to be searching for properties during the week or on weekends.
They engaged me for the full service to find them an investment property to buy.
What was most important to the client
Strong capital growth potential in the medium to long term
Solid rental return
A property that in the future may be lived in by one of their children
As close to the eastern suburbs beach as the budget would allow
Avoiding high density areas and buildings
Ensuring no major system strata issues
Minimal cosmetic work required to property in the next 5 - 10 years so ideally something recently renovated
The search
The best strategy here was to buy something with an existing fixed term tenancy (therefore being of low interest to owner occupier house hunters) to ensure competition was low and we could buy at the right price. The added bonus in this scenario is that the client gets rental income from day one and does not need to wait for the property to be rented out.
We also wanted to find a property that would have solid owner occupier appeal when they go to sell in the future, to help ensure they achieve the best possible price. This included:
Excluding properties without parking - a hot commodity around the eastern beaches
Excluding apartments with external and/or share laundry - this turns a lot of buyers off
Ensuring natural light was plentiful
Walking distance to the beach
The property
We identified an off market two bedroom apartment, with one spacious bathroom, and a parking space on title. The apartment is east facing towards Bondi beach and a 5 minute walk to the sand. Renovated about ten years ago it was in very good condition.
The property had an existing tenant who had recently renewed a twelve month lease and indicated they would like to remain on living there when that lease expires. The rental yield was ~4.5% which is far superior than the suburb median of 3.5%.
There are only 12 apartments in the block making it a nice small, low maintenance strata scheme. There is upcoming work to replace the roof but we made sure to factor these costs into our purchase price.
The outcome
The property was off market meaning it did not appear on real estate portals or search engines. With tenanted properties it can sometimes be difficult to gain access for a sale and so I was unable to physically inspect prior to visiting with my clients. This meant I did as much research as possible beforehand to ensure it may be a good fit including reviewing an old strata report to get an early read on the potential costs of the roof repairs.
We inspected the property and also had the benefit of meeting the tenant. This can be helpful when buying an investment just to get ‘a feel’ for how they may look after your property.
After inspecting we commissioned an updated strata report and a contract review. Additionally we worked through the pricing research of recent comparable sales and looking at nearby properties for potential development that may impact on this apartment.
When the due diligence was completed and everything lined up, we put in a formal offer. Within five days of seeing the property we had exchange contracts unconditionally without any other buyers even stepping foot inside.
Learnings
If this property was sold with vacant possession and styled furniture, it would without a doubt have sold for more than we bought it and potentially even more than what my clients could afford. This is the value of a strategy which looks to maximise each buyers unique circumstances - and here we bought a property off market that fit all their criteria and at a fantastic price.
